A&B Healthcare Week in Review, December 4, 2015

I. REGULATIONS, NOTICES, & GUIDANCE

• On December 1, 2015, Centers for Medicare and Medicaid Services (CMS) called for public comments on the 0.2% payment reduction in inpatient prospective payment systems (IPPS) rates as called for in the 2014 Medicare IPPS Final Rule. In accordance with a ruling from the United States District Court for the District of Columbia in Shands Jacksonville Medical Center, Inc., et al. v. Burwell, No. 14-263 and consolidated cases that challenge the payment reduction to account for the estimated $220 million in additional FY 2014 expenditures resulting from the 2-midnight policy, this notice discusses the basis for the 0.2 percent reduction and its underlying assumptions and invites comments on the same, in order to facilitate the agency’s consideration of the reduction. CMS will consider and respond to comments in a final notice to be published by March 18, 2016. Commenters should provide feedback by February 2, 2016.
• On November 25, 2015, the Department of Health and Human Services (HHS) released a notice entitled “Federal Financial Participation in State Assistance Expenditures; Federal Matching Shares for Medicaid, the Children’s Health Insurance Program, and Aid to Needy Aged, Blind, or Disabled Persons for October 1, 2016”. The Federal Medical Assistance Percentages (FMAP), Enhanced Federal Medical Assistance Percentages (eFMAP), and disaster-recovery FMAP adjustments for Fiscal Year 2017 have been calculated pursuant to the Social Security Act (the Act). These percentages will be effective from October 1, 2016 through September 30, 2017. This notice announces the calculated FMAP rates, in accordance with sections 1101(a)(8) and 1905(b) of the Act, that HHS will use in determining the amount of federal matching for state medical assistance (Medicaid), Temporary Assistance for Needy Families (TANF) Contingency Funds, Child Support Enforcement collections, Child Care Mandatory and Matching Funds of the Child Care and Development Fund, Foster Care Title IV-E Maintenance payments, and Adoption Assistance payments, and the eFMAP rates for the Children’s Health Insurance Program (CHIP) expenditures.
• On December 1, 2015, the Department of Veterans Affairs (VA) released an interim final rule entitled “Expanded Access to Non-VA Care through the Veterans Choice Program.” VA revises its medical regulations that implement section 101 of the Veterans Access, Choice, and Accountability Act of 2014 (“the Choice Act”), which requires VA to establish a program to furnish hospital care and medical services through eligible non-VA health care providers to eligible veterans who either cannot be seen within the wait-time goals of the Veterans Health Administration (VHA) or who qualify based on their place of residence. These regulatory revisions are required by the most recent amendments to the Choice Act made by the Construction Authorization and Choice Improvement Act of 2014, and by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. The Construction Authorization and Choice Improvement Act of 2014 amended the Choice Act to define additional criteria that VA may use to determine that a veteran’s travel to a VA medical facility is an “unusual or excessive burden,” and the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 amended the Choice Act to cover all veterans enrolled in the VA health care system, remove the 60-day limit on an episode of care, modify the wait-time and 40-mile 2 distance eligibility criteria, and expand provider eligibility based on criteria as determined by VA. This interim final rule revises VA regulations consistent with the changes made to the Choice Act as described above. The regulations are effective December 1st; comments must be received on or before March 30, 2016.
• On November 24, 2015, the Centers for Disease Control and Prevention (CDC) released a “Request for Nominations of Candidates to Serve as Members of the Community Preventive Services Task Force (CPSTF); Reopening of Nomination Period”. The nomination period originally closed on November 9, 2015; comments are now due December 8, 2015.
• On November 25, 2015, the Food and Drug Administration (FDA) announced the availability of a revised draft guidance for industry entitled “Certification Process for Designated Medical Gases.” The original version of this draft guidance was published by FDA on December 18, 2012. The revised draft guidance, like the original version, describes the certification process created by the Food and Drug Administration Safety and Innovation Act (FDASIA) for certain medical gases and explains how FDA plans to implement that process. In response to comments received, the Agency has revised the draft guidance and are reissuing it in draft form to enable the public to review and comment before it is finalized. Comments should be submitted by January 25, 2016.
• On December 3, 2015, CMS released a notice entitled “Medicare, Medicaid, and Children's Health Insurance Programs; Provider Enrollment Application Fee Amount for Calendar Year 2016”. This notice announces a $554.00 calendar year (CY) 2016 application fee for institutional providers that are initially enrolling in the Medicare or Medicaid program or the Children's Health Insurance Program (CHIP); revalidating their Medicare, Medicaid, or CHIP enrollment; or adding a new Medicare practice location. This fee is required with any enrollment application submitted on or after January 1, 2016 and on or before December 31, 2016.
• HHS recently released its Agency Rule List for Fall 2015; it may be accessed here.

Event Notices

• February 3, 2016: On February 3rd, FDA will convene a meeting of the Psychopharmacologic Drugs Advisory Committee. During the morning session, the committee will discuss cognitive dysfunction in major depressive disorder (MDD). During the afternoon session, the committee will discuss new drug application 204447/supplemental new drug application 006, for the effectiveness of vortioxetine for the treatment of cognitive dysfunction in MDD, submitted by Takeda Development Center Americas, Inc. More information may be found here.
• February 16, 2016: CMS will convene a Town Hall Meeting on the FY 2017 Applications for New Medical Services and Technologies Add-On Payments. This notice announces a Town Hall meeting in accordance with section 1886(d)(5)(K)(viii) of the Social Security Act (the Act) to discuss fiscal year (FY) 2017 applications for add-on payments for new medical services and technologies under the hospital inpatient prospective payment system (IPPS). Interested parties are invited to this meeting to present their comments, recommendations, and data regarding whether the FY 2017 new medical services and technologies applications meet the substantial clinical improvement criterion. More information may be found here.
• March 14-15, 2016: On November 30, 2015, CMS announced a meeting of the Advisory Panel on Hospital Outpatient Payment (the Panel) for March 14-15, 2016. The purpose of the Panel is to advise the Secretary of HHS and the Administrator of CMS on the clinical integrity of the Ambulatory Payment Classification (APC) groups and their associated weights and hospital outpatient therapeutic services supervision issues. More information may be found here.

II. CONGRESSIONAL LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On December 3, 2015, the Senate passed the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015 (H.R. 3762). The measure (which passed the House on October 23rd) was advanced using the reconciliation process, by a vote of 52-47. Senators Susan Collins (R-ME) and Mark Kirk (R-IL) were the only two Republicans to vote against the bill. Both the House and Senate versions of the bill would repeal major components of the Affordable Care Act (ACA), including repealing the 2.3% excise tax on medical devices; eliminating financial penalties associated with the individual and employer mandates; and repealing the so-called “Cadillac tax” on health plans. In a Statement of Administration Policy, the Obama Administration indicated that if presented with H.R. 3762, the President would veto the bill.
• On December 2, 2015, the Senate Veterans Affairs Committee convened a hearing entitled “Consolidating Non-VA Care Programs”. The primary witness for Panel I was the Honorable Sloan Gibson, Deputy Secretary of the U.S. Department of Veterans Affairs (VA). Gibson was accompanied by The Honorable David J. Shulkin M.D., Under Secretary for Health, U.S. Department of Veterans Affairs; Dr. Baligh Yehia, Assistant Deputy Undersecretary for Health for Community Care, Veterans Health Administration, U.S. Department of Veterans Affairs; and Mr. Joe Dalpiaz, Network Director, Heart of Texas Health Care Network (VISN 17), Veterans Health Administration, U.S. Department of Veterans Affairs. Witnesses for Panel II included Mr. Roscoe Butler, Deputy Director for National Veterans Affairs and Rehabilitation Division of The American Legion; Mr. Darin Selnick, Senior Veterans Affairs Advisor for Concerned Veterans for America; Mr. Bill Rausch, Political Director for Iraq and Afghanistan Veterans of America; and Mr. Raymond Kelley, Director of National Legislative Service for Veterans of Foreign Wars. More information on the hearing may be found here.
• On December 3, 2015, Senators Orrin Hatch (R-UT) and Chuck Grassley (R-IA) issued a letter to CMS Acting Administrator Andy Slavitt requesting that CMS “account for how much federal money it has given to each state health care exchange, how much money it has identified as misused, what it can do to recover money for unallowable activities, and how much money for unallowable activities it has recovered.” “Given the continuing failure of SBMs (state-based marketplaces or exchanges) and the use of taxpayer funds for unallowable activities, CMS has an elevated responsibility to ensure that any future funding to SBMs is appropriate and that SBMs fulfill all grant terms and conditions,” Grassley and Hatch wrote. “With the ongoing risk that more SBMs will shut down or partially transition to the federal IT structure, and the continuing threat that SBMs will use taxpayer funds for unallowable activities, it is imperative to determine the full cost to the taxpayer of the failures thus far, and what funds the federal government has been able to recover.”
• On December 1, 2015, Senate Finance Ranking Member Ron Wyden (D-OR) and senior Committee Member Chuck Grassley (R-IA) released results of an 18-month investigation into the pricing and marketing of Gilead Sciences’ Hepatitis C drug Sovaldi and its second-wave successor, Harvoni. According to a press release, “Drawing from 20,000 pages of internal company documents, dozens of interviews with health care experts, and a trove of data from Medicaid programs in 50 states and the District of Columbia, the investigation found that the company pursued a marketing strategy and final wholesale price of Sovaldi – $1,000 per pill, or $84,000 for a single course of treatment – that it believed would maximize revenue. Building on that price, Harvoni was later introduced at $94,500. Fostering broad, affordable access was not a key consideration in the process of setting the wholesale prices.” More information on the report and a joint press release by Senators Wyden and Grassley may be found here.

House of Representatives

• On December 1, 2015 the House passed the Breast Cancer Research Stamp Reauthorization Act of 2015 (S. 1170) under suspension. The Senate passed the measure on September 22nd, and was presented to the President on December 3rd. Originally the Stamp Out Breast Cancer Act (Public Law 105-41) authorized a special postage stamp for first-class mail. The price of this stamp is 60 cents, 11 cents above the current rate of 49 cents. After accounting for the Postal Service’s administrative costs, amounts above the regular postal rate collected from sales of the special stamp are transferred to the National Institutes of Health (NIH) and the Department of Defense (DoD) to spend on breast cancer research. The authority to issue the stamp expires on December 31, 2015. The Stamp Out Breast Cancer Act would extend this program until December 31, 2019.
• On December 2, 2015, the House Democratic Steering and Policy Committee held a hearing entitled “Ensuring Access and Affordability of Prescription Drugs, While Spurring Innovation.” Witnesses for the hearing included: Lynn Quincy, Director of the Health Care Value Hub with Consumers Union; Andrea Maresca, Director of Federal Policy & Strategy for the National Association of Medicaid Directors (NAMD); Dr. Jeremy Greene, Associate Professor of Medicine and the History of Medicine at Johns Hopkins University School of Medicine; and Brian Lehman, Manager of Pharmacy Benefits and Policy with the Ohio Public Employees Retirement System (OPERS). A recording of the hearing may be accessed here.
• On December 3, 2015, the House Armed Services Committee convened a hearing entitled “Stakeholder Views on Military Health Care”. Witnesses for the hearing included Mr. Scott Bousum, Legislative Director, Enlisted Association of the National Guard of the United States; Vice Admiral (Ret.) Norbert R. Ryan Jr., President and CEO, Military Officers Association of America; and Ms. Joyce Raezer, Executive Director. More information on the hearing may be found here.
• On December 3, 2015, House Speaker Paul Ryan (R-WI) gave a speech about his vision for Congress in 2016. His prepared remarks, which may be found here, include the following comments on healthcare: “I’ve long believed we should offer an individual tax credit to help people pay for premiums—giving more to the old and sick. There are a lot of other ideas out there, but what all conservatives can agree on is this: We think government should encourage personal responsibility, not replace it. We think prices are going up because people have too few choices, not because they have too many. And we think this problem is so urgent that, next year, we are going to unveil a plan to replace every word of Obamacare.”

III. REPORTS, STUDIES, & ANALYSES

• On November 20, 2015, the Urban Institute released a report entitled “Financing Long-Term Services And Supports: Options Reflect Trade-Offs For Older Americans And Federal Spending”. [The article was published in Health Affairs’ November issue]. Under current policy, individuals who need long-term services and supports (LTSS) fund roughly half their care. Partly as a result of high costs and uncertainty, relatively few people purchase private long-term care insurance or save sufficiently to fully finance LTSS; many will eventually turn to Medicaid for help. To show how policy changes could expand insurance’s role in financing these needs, researchers modeled several new insurance options. Specifically, they looked at a front-end-only benefit that provides coverage relatively early in the period of disability but caps benefits, a back-end benefit with no lifetime limit, and a combined comprehensive benefit. The authors modeled mandatory and voluntary versions of each option, and subsidized and unsubsidized versions of each voluntary option. They identified important differences among the alternatives, highlighting relevant trade-offs that policy makers can consider in evaluating proposals. “If the primary goal is to significantly increase insurance coverage,” they concluded, “the mandatory options would be more successful than the voluntary versions. If the major aim is to reduce Medicaid costs, the comprehensive and back-end mandatory options would be most beneficial.”
• On November 20, 2015, the Government Accountability Office (GAO) released a study entitled “Medicare Part B: Expenditures for New Drugs Concentrated among a Few Drugs, and Most Were Costly for Beneficiaries”. Questions have been raised about the effects of newly approved drugs on spending by the Medicare Part B program and its beneficiaries. Medicare Part B pays for drugs that are commonly physician-administered. In 2013, the Medicare program and its beneficiaries spent $20.9 billion on Part B drugs. GAO was asked to review newly approved Part B drugs. This report (1) describes drugs newly approved by FDA and paid for by Medicare Part B and compares them to drugs newly approved and not paid for by Part B and (2) analyzes spending and utilization patterns for new Part B drugs. According to GAO, “Expenditures for new Part B drugs were concentrated among a small number of drugs and conditions, and most new Part B drugs were costly for beneficiaries. GAO identified expenditures in 2013 for 75 of the 83 new Part B drugs. Expenditures for these 75 drugs in 2013 were concentrated among 3 drugs—Lucentis, Eylea, and Prolia—which accounted for 53 percent of the $5.9 billion Medicare and its beneficiaries spent on new Part B drugs. The 20 highest expenditure drugs accounted for 92 percent of 2013 expenditures on new Part B drugs and for 26 percent of total expenditures for Part B drugs.”
• On November 23, 2015, the Congressional Budget Office (CBO) released a working paper entitled “Changes in Medicare Spending per Beneficiary by Age: Working Paper 2015-08”. The aging of the population exerts upward pressure on federal spending for health care, especially Medicare, as both the number and average age of elderly beneficiaries increase. Total Medicare expenditures may also be affected by changes in relative per-beneficiary spending for beneficiaries of different ages as the population ages. In this paper, researchers use the Master Beneficiary Summary File to estimate spending per beneficiary for the elderly population (people between ages 65 and 105) enrolled in the traditional fee-for-service (FFS) Medicare program between 1999 and 2012. Over that period, the age for which Medicare spending per beneficiary was highest increased from 89 to 97. In addition, spending per beneficiary grew faster for older beneficiaries than for younger ones in the second half of the period.
• On November 25, 2015, the CMS Center for Medicaid and CHIP services released a document entitled “Certification of Comparability of Pediatric Coverage Offered by Qualified Health Plans”. HHS reviewed the second lowest cost silver plan (SLCSP) in the largest rating area in each state to compare it to CHIP in that state and determined that CHIP and Marketplace coverage offer beneficiaries different levels of financial protection and benefits, reflecting the programs’ different purposes and structure as established in statute. The review found that the average out-of-pocket spending in the SLCSP was higher than out-of-pocket spending in CHIP for CHIP eligible children in all states reviewed, on a per child basis under CHIP and under SLCSP with financial assistance. In addition, the AV of CHIP exceeds the AV of the SLCSP in every state reviewed except Utah, where the CHIP and SLCSP AVs are equivalent. This finding indicates that families are expected to pay for a larger percentage of expected covered health care costs in QHPs than CHIP in all but that state. When premiums are taken into account, Utah’s average out-of-pocket spending in the SLCSP was higher than out-of-pocket spending in CHIP.
• On November 30, 2015, GAO released a report entitled “Nursing Home Quality: CMS Should Continue to Improve Data and Oversight”. In recent years, trends in four key sets of data that give insight into nursing home quality show mixed results, and data issues complicate the ability to assess quality trends. Nationally, one of the four data sets—consumer complaints—suggests that consumers' concerns over quality have increased, while the other three data sets—deficiencies, staffing levels, and clinical quality measures—indicate potential improvement in nursing home quality. GAO was asked to study these trends. GAO recommends, among other things, that CMS implement a clear plan for ongoing auditing of self-reported data and establish a process for monitoring oversight modifications to better assess their effects. HHS agreed with GAO's recommendations.
• This week the Medicaid and CHIP Payment and Access Commission (MACPAC) released its report, “MACStats: Medicaid and CHIP Data Book”. The December 2015 MACStats data book includes an overview with key statistics on Medicaid and CHIP; trends in Medicaid; Medicaid and CHIP enrollment and spending with information on benefits, managed care, and program administration; Medicaid and CHIP eligibility; and measures of beneficiary health, use of services, and access to care. MACPAC plans to convene next week on December 10th for a public meeting; details on the agenda may be found here.

IV. OTHER HEALTH POLICY NEWS

• On December 2, 2015, CMS released an updated Open Enrollment “Snapshot” for November 22nd-November 28th. In an announcement on the data, CMS wrote, “Four weeks into Open Enrollment and consumers continue to show a strong interest in exploring their health care options and signing up for coverage. In the fourth week of Open Enrollment, almost 395,000 people selected plans using the HealthCare.gov platform, totaling over two million plan selections since November 1.” In addition to national data, the Week 4 snapshot includes state-by-state plan selection estimates for those states using HealthCare.gov.
• On December 3, 2015, CMS updated its official estimates of total health care spending in the United States. Dating back to 1960, the National Health Expenditure Accounts (NHEA) measures annual U.S. expenditures for health care goods and services, public health activities, government administration, the net cost of health insurance, and investment related to health care. The data are presented by type of service, sources of funding, and type of sponsor. U.S. health care spending grew 5.3 percent in 2014, reaching $3.0 trillion or $9,523 per person. As a share of the nation's Gross Domestic Product, health spending accounted for 17.5 percent. More information may be found here.
• On December 2, 2015, the Medicare Payment Advisory Commission (MedPAC) issued a letter to CMS Acting Director Andy Slavitt regarding CMS’ memorandum entitled “Request for Comments: Enhancements to the Star Ratings for 2017 and Beyond”. In the letter, MedPAC urges CMS to use an adjustment factor under the Medicare Advantage quality star rating system when differences in performance between low-income and other enrollees within the same MA contract affect the contract's quality rating. MedPAC writes, “…given the agency’s desire to implement an appropriate interim measure as it develops a more analytically rigorous long-term solution, we believe that two of the approaches discussed in the memorandum, the Categorical Index Adjustment is administratively less complicated [than the indirect standardization approach] but still addresses the concerns plans have raised”.